The UK and wider European area is falling behind other major life sciences markets. This warning comes from the CEO of Britain’s largest pharmaceutical company.
Sir Pascal Soriot of AstraZeneca said today that the region was behind the US, Japan and China, as well as “numbers of other markets”.
Soriot, 63 years old, is an industry veteran and has been in charge of AstraZeneca for the last ten year. He said that he is “very aware” of financial challenges posed by rising interest rates, inflation, and cost of living. But he added that it was important that governments keep their eye on the future and invest and create a supportive environment.
His comments follow his concerns expressed in February at AstraZeneca’s full-year financial results about the operating climate in the UK. He blamed uncompetitive taxes for AstraZeneca’s decision to invest in a new manufacturing facility instead of Britain .
The pharmaceutical industry has a rift with the NHS over an “escalating” sales tax, which it says is affecting investment. The European Commission is pushing ahead with its plan to reduce the number of years that drugmakers have had exclusive market access, despite the fierce opposition of the industry. In an effort to overhaul the two decades worth of legislation that governs the pharmaceutical industry, the EU wants to reduce the cost of drugs and increase availability by encouraging companies either to release new medicines or to face increased competition from the generics.
Soriot stated that it is “always possible” to catch up, as Europe “has lots of strengths and opportunities to grow and innovate”, but not with “the kind of economic policy the European Commission thinks about”.
He said: “I’m sure some people won’t be happy to hear it, but I think it’s important that people know the truth. Otherwise we will see an acceleration in the decline of investments seen in Europe compared to the rest the world.
In ten years, people will notice that Europe is further behind. They will wonder why. The answer will be very simple: wrong policies were implemented.
Soriot recently returned from China, a market that is becoming increasingly important for AstraZeneca and has supported the company’s growth in its first quarter. He stated that it was “hard not to be impressed” by the sights. “The progress made in China during the past few years has been truly impressive.”
He cited the rapid growth of clinical trials in China and the “explosion” of biotech companies in China that have come up with innovative new medicines and technologies.
AstraZeneca outperformed City forecasts in the first quarter thanks to its strong performance in emerging market. The total group revenue dropped by 4 percent to $10.9 billion for the three-month period ending March. This was due to a drop of nearly $1.5 billion in Covid medicines, as demand for vaccines & antibody therapies waned. AstraZeneca’s revenue increased by 10% when Covid medicines are excluded. These drugs were the ones that made AstraZeneca famous during the crisis.
AstraZeneca, which was a struggling company with a patent crisis a decade earlier, has now become one of Britain’s largest public companies. It has also surpassed GSK to become the UK’s top pharma group.
AstraZeneca shares have reached new highs and its market value has risen to more than £180billion, putting it ahead of the US giant Pfizer. In 2014, a PS69billion takeover bid for AstraZeneca was rejected.
AstraZeneca has achieved its success due to the release of new medicines especially cancer treatments. The total revenue from oncology drugs increased by 19% in the third quarter. Profit before tax for the group rose from $553 millions to $2.3 billion in just one year.
The trading update was presented before AstraZeneca’s annual general meeting, where Michel Demare (66), who has served as a non-executive director since 2019, will replace Leif Johansson (71), who had been chairman of the company since shortly after Soriot’s appointment.
He said, “I look forward working with him for many years to come.”
AstraZeneca shares, which reaffirmed their full-year outlook, dropped by 48p or 0.4 percent to close at £117.96.